Propagation of signal transduction events usually involves protein-protein interactions, (eg protein phosphorylation and substrate-enzyme reactions). Such events are highly enhanced in magnitude and specificity if the proteins involved are associated with and concentrated in the same membrane domain, rather than distributed over a large number of disconnected domains (Thompson et al., 1995). We believe that membrane lipid domains can impart a magnifying or quenching effect on membrane associated cascading reactions. For this contention to be valid, regulation of domains is necessary to prevent random modulation of a cascade reaction by the mere presence of domains. Fluid lipid domains are dynamic structures (in model membrane systems) whose differences in interaction energies between different lipid species are quite small, on the order of hundreds of calories per mole (Sugar et al., 1994, 1999, Jerala et al., 1996). The large number of lipids present in membranes magnifies such lipid-lipid interactions, leading to domain formation. In contrast, protein-lipid interactions are usually on the order of kcal/mol of protein and vary with lipid composition. Differential protein-lipid interactions that vary with lipid composition may then enhance formation or disintegration of domains. Annexins are an abundant family of membrane-associated proteins with diverse distribution in organisms, which bind anionic phospholipids and Ca2+ and do not have any apparent enzymatic function. The present grant proposal is based on a fundamental concept; that annexins have a general organizational function on cell membranes. The manner in which this function is achieved is through binding and consequent stabilization of lipid domains. We will approach this hypothesis using an integrative approach that combines experimental work (spectroscopy, calorimetry and molecular biology) with Monte Carlo computer simulation in the study of a protein-lipid bilayer model system. The approach is iterative, building in complexity of the model lipid system and type of annexin with each step.